It is very difficult to say why such great soccer nations like Germany and Italy are in crisis. German and Italian clubs are very successful in European club competitions, but their national teams are not, with the exception of Italy at the last EURO.
For me, the main favorites at the EURO are France, England, Spain, Portugal, Belgium, but also Croatia as a hidden favorite.
The national team that has Modrić and won 2 medals at the last 2 world cups simply can't be underestimated.
However, in my opinion, France has the best chance.
Success of the clubs doesn't automatically translate to good performance by the national teams. Because a majority of the players will be ineligible to represent the national team due to foreign citizenship. Germany is in crisis for sure, although I am not that sure about Italy. But then the very fact that Italy failed to qualify for the FIFA World Cup of 2022 tells a lot about the challenges they are facing. In case of Germany, they are simply unable to replace the star players who retired in the past few years. At this point they are heavily dependent on players like Thomas Müller and İlkay Gündoğan.